Advice from the Old Guys

When it comes to establishing a new small business, it’s been a long-held belief that 50 percent fail within the first year, and of the rema

Shira Levine

Contributing writer and columnist, Business Insider

When it comes to establishing a new small business, it’s been a long-held belief that 50 percent fail within the first year, and of the remaining businesses, 95 percent fail within five years. The statistics have improved over the years, but there’s still plenty of room for improvement.

I didn’t speak with successful new small businesses, but rather with a company that has sustained success for 100 years: the international spa brand Red Door, created by Elizabeth Arden. Since the salon chain first opened in 1910, it has managed to create a solid identity and loyal following that crosses generations. Few business owners want to flip their concept after a few years, and certainly no business owner wants to see his or her dream business fail after a year or two. I spoke with Tanuj Puri, senior financial analyst with Red Door Spas about what new and younger businesses can do to keep their small operations flourishing generation after generation.

Be consistent.The spa industry tends to have one aspect that they excel in but are weaker in other areas. “Ms. Arden’s ideology was that repetition builds reputation and creates the ability to deliver the experience as well as the results,” says Puri. “You may have the results but not the experience, or vice versa. Because we’ve done this and have this balance, we give guests real value in the experience and service results.”

Invest in and train your staff.It all starts with service delivery. Red Door is about having the right people on their staff who are passionate about servicing others. By giving their staff the right tools and training them, you confirm that what they do from the top down reflects what you want your clients to understand and feel about the brand.

“There is a huge emphasis on learning, development and training with us,” says Puri. “We are comfortable knowing anyone who walks into a Red Door will be met with a certain standard that is always being followed. When everyone in your organization shares the same values and beliefs, it will be impossible for the guest not to feel it. When the guest has a great experience, he or she will come back more often and will tell their friends about us.”

Be driven by innovation.Just because Arden was a genius 100 years ago and created a lot of incredible products doesn’t mean the work is done. Red Door continues to work with new technologies in therapies and products and in developing customer relationship management systems.

“We are involved not with trends, but what we believe sustainably will be relevant for a long time,” says Puri. “We are 100 years in this business and we aren’t stopping. We maintain the same core values we’ve always had: commitment, relationships, integrity, simplicity, passion and creativity and we look forward to our next 100 years in this business.”

Nurture and expand your demographic.Red Door Spas has the unique advantage of having created a brand that translates multi-generationally. Grandmothers, mothers and daughters across the country visit the salons.

“The longevity in the brand follows clients as they grow up and return,” says Puri. “It’s a cycle that keeps coming back to us. That familiarity and comfort with our brand is a safe haven for us. We survived recessions and that says something to our clients.”

Connect intimately and locally with like-minded businesses.Red Door Spa in New York joined the organization NYSPA (The New York Spa Alliance), along with other local spas throughout New York City and New York State. It turns out, says Puri, that New York Sstate has the largest concentration of spas in the world and there was a need and desire to create a community celebrating this.

“We’re a fragmented industry,” says Puri. “We like being part of smaller organizations that aren’t trying to achieve everything under the sun. For us it was about being with accomplished people who are coming together for education, the ability to network, and the ability to access the collective expertise of the membership.”